Brexit: What Now for Intellectual Property?

Along with workers' rights, economic concerns and international trade agreements, one important consideration for businesses in the UK - particularly for small to medium enterprises - is how Brexit will affect an organisation's protection of their intellectual property. While potentially compromised intellectual property rights may not dominate the scare-mongering headlines, the implications for British SMEs are worth noting.

The first point to note is that there will be no immediate impact on intellectual property rights. The UK is set to retain its membership of the EU for at least another two years whilst the exit procedure is formulated and implemented and not much is expected to change in the interim. However, this doesn't mean that the impact of Brexit can be ignored.

Much of the UK's IP legislation is intertwined with EU Regulations and Directives, and whilst it is unlikely to play a leading role in Brexit negotiations, it will need to be considered very carefully by Her Majesty's Government.

Many of the EU Regulations and Directives, especially in the life sciences arena, will need to be assumed into UK legislation in order to avoid a "regulatory vacuum". Furthermore, there will need to be clarity in relation to historical decisions made by the European Court of Justice and the effect these will have in the UK going forward.

Unitary Patent System (UPS) and Unitary Patent Court (UPC)

The UPS has been roughly 10 years in the making and, being one of the three countries with the largest number of European Patent designations in force, the UK was heavily involved in negotiations to establish this system. The UPS has been designed to simplify the process for a business to apply for patent protection in multiple EU countries. The UPC will allow a claimant to challenge any infringements in a centralised court whose jurisdiction covers EU member states.

Without being a member state, the UK will not be eligible to take part in the UPC system. Therefore, businesses looking to obtain patent protection across the EU via this system will have to make a separate application to the UK which is likely to increase costs.

While the impact being excluded from the UPS may have on each business will depend on the number of markets that they're trying to protect, the risk of leaving intellectual property exposed - or of entering disputes or facing infringement cases - will undoubtedly be greater than if covered by the type of blanket-protection that the Unitary Patent could provide.

European Community Rights

Current EU trademarks and registered designs will continue to apply in the immediate aftermath of Brexit. It is likely that we will see a transitional arrangement governing existing registrations but ultimately these will cease to have effect over time and proprietors will need to apply for separate protection in the UK.

Unregistered EU design right, which provides 3 years of protection from the date on which the product was first made available to the EU public, is likely to no longer apply to UK businesses. UK unregistered design right will still exist but any protection outside the UK will only be available through registration.

Contractual Agreements

Many intellectual property rights holders will have licensing, franchise and co-existence agreements that cover various different European countries. It will be important to review these agreements to ensure that they continue to confer the intended rights in the intended jurisdictions.

Conclusion

The long-term effect of Brexit on IP rights is still very unclear. There is likely to be a lot of negotiation in this area given the intimate relationship between EU and UK legislation. The biggest impact will undoubtedly be the UK's exclusion from EU registration systems, such as the UPC and European Trademarks, and the protections that these offer. Consideration will also need to be given to the regulatory impact of Brexit, especially in the life sciences area.

The starting point for any business which relied on EU IP protection is to identify which of their rights are likely to be affected and to start considering potential applications for registration in the UK as well as the EU. A review of all IP contracts is also highly recommended in order to be prepared for the road head.